This may sound surprising but….we don’t care what your net worth is, and here’s why:
First of all, what is net worth? Net worth is defined as the total wealth of an individual, company, or household, taking into account ALL financial assets and liabilities.
Net worth is the typical gold standard of financial progress. If that number is always going up and to the right, it’s understood that you are headed in the right direction.
But what if that’s a myth? What if there’s a better approach?
Using only net worth as a measurement tool can create consequences to your portfolio that may include:
– The inability to refinance or obtain a mortgage
– Rising costs of inflation
– Inevitable tax increases
– Stocks declining in a volatile market
Don’t care too much about your net worth that you miss out on these other factors in life. It’s important to consider things like income-producing assets, inflation protection, and tax-advantaged financial tools as you assess your total financial picture.
Approaching your portfolio in this manner is more to track and more to think about than just your assets and liabilities – BUT this is why it’s important to start small, be intentional, and consistently make these small shifts over time.
Check out this video for more tips on this important topic!
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